The major record labels are known for their harsh stance on copyright infringements, which in an ironic turn of events is now costing them millions of dollars. Revealing a double standard when it comes to 'piracy', Warner Music, Sony BMG Music, EMI Music and Universal Music now have to pay Canadian artists $45 Million for the illegal use of thousands of tracks on compilation CDs.

It is no secret that the major record labels have a double standard when it comes to copyright. On the one hand they try to put operators of BitTorrent sites in jail and ruin the lives of single mothers and students by demanding hundreds of thousands of dollars in fines, and on the other they sell CDs containing music for which they haven’t always cleared the rights. This happens worldwide and more frequently than one would think.

Over the years the labels have made a habit of using songs from a wide variety of artists for compilation CDs without securing the rights. They simply use the recording and make note of it on “pending list” so they can deal with it later. This has been going on since the 1980s and since then the list of unpaid tracks (or copyright infringements) has grown to 300,000 in Canada alone.

This questionable practice has been the subject of an interesting Canadian class action lawsuit which was started in 2008. A group of artists and composers who grew tired of waiting endlessly for their money filed a lawsuit against four major labels connected to the CRIA, the local equivalent of the RIAA.

Warner Music, Sony BMG Music, EMI Music and Universal Music were sued for the illegal use of thousands of tracks and risked paying damages of up to $6 billion. Today the news broke that the two parties have agreed upon a settlement, where the record labels are required to pay $45 million to settle the copyright infringement claims.

During the case the labels were painfully confronted with their own double standard when it comes to copyright infringement. “The conduct of the defendant record companies is aggravated by their strict and unremitting approach to the enforcement of their copyright interests against consumers,” the artists argued in their initial claim for damages.

Of course, the labels are not so quick to admit their wrongdoing and in their press release the settlement is described as a compromise. “The settlement is a compromise of disputed claims and is not an admission of liability or wrongdoing by the record labels,” it reads.

David Basskin, President and CEO of one of the major Canadian licensing collectives, was nonetheless happy with the outcome. “This agreement with the four major labels resolves all outstanding pending list claims. EMI, Sony, Universal and Warner are ensuring that the net result is more money for songwriters and music publishers. It’s a win for everyone,” he said.

The major issues that led to this dispute are not resolved though. After paying off a small part of their debt the labels can continue to ‘pirate’ artists’ music as usual, using their work and placing the outstanding payments on a pending list for decades. A real solution would require the licensing system to change, and that’s not likely to happen anytime soon.